Southern Cross landlords to take over all homes

• Southern Cross to be broken up • 500 homes could still be sold on • Uncertainty continues for residents Stricken care home chain Southern Cross is being broken up after attempts to rescue the company floundered. Britain’s largest operator of care homes told the City that its 750 homes are being taken over by its landlords, a move which brings more uncertainty for some of its residents. The decision also means that shareholders in the company will be wiped out. Under this plan, 250 of Southern Cross’s homes will be transferred to landlords who are either care operators already or who have “strong links” to firms who provide such services. The owners of the remaining 500 homes, though, are still “finalising their plans”, which could involve homes being sold. “My objective, and that of my team, is to continue to provide excellent care to every resident and to manage the programme of transition professionally,” said chief executive Jamie Buchan. Southern Cross had hoped to hammer out a deal with its landlords that would have allowed the company to keep operating but admitted on Monday that all landlords had said they would leave the group – as predicted last month . Southern Cross itself will therefore cease to be a care provider once the handover has been completed. “As part of the plan, in addition to ensuring continuity of care to residents, all payments to trade creditors are to be maintained and all home-based staff transferred on their current terms,” the group said. Southern Cross’s future has been hanging in the balance since March, when it warned that its rental bill was unsustainable . The crisis escalated when the company, which has been hit by cutbacks by local authorities and rising operating costs, cut rent payments to its landlords by 30%. Controversially, Southern Cross had followed a policy of buying homes, then selling them on to landlords and leasing them back again. Trading in Southern Cross shares have been suspended. They had already fallen to just 6.25p, having been worth £6 in late 2007. Southern Cross Healthcare Healthcare industry Long-term care Social care Graeme Wearden guardian.co.uk

Posted by on July 11, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.